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Stock Sale To Raise Sonoran Lithium Mine Funds Called Off

The company behind a major planned lithium mine in Sonora recently called off a sale of shares to help fund the project.

The sale was expected to raise an additional $100 million for Bacanora Lithium, on top of the $240 million the company has already secured, according to a July 19 release on the decision. Construction of the first phase of the mine is expected to cost $460 million.

The company cited commodities market volatility, and said it will now focus on front end engineering design and securing the remaining funding needed.

"Challenging market conditions have led us to make the decision not to proceed with the placing at this stage. From the perspective of a lithium developer such as ourselves, being a low-cost producer is key to successfully navigating price volatility,” CEO Peter Secker said in the release. “Whilst recent fluctuations in lithium pricing forecasts continue, the development of the Sonora project remains our priority.”

A Sonoran state government release in May said that construction could begin as soon as September.

Lithium is used in electric car batteries, along with many other applications.

Lithium market expert Joe Lowry shared his analysis on the about-face.

“The market for lithium chemicals has never been stronger, demand has never been stronger,” he said. “But there’s a negative sentiment in the market, especially for junior lithium stocks right now.”

He added that this sentiment is, in part, due to a February Morgan Stanley report that warned of a looming lithium glut, something Lowry is skeptical of.

Born and raised in the Intermountain West, Murphy Woodhouse has called southern Arizona home for most of the last decade. He’s one of two field correspondents at KJZZ’s Hermosillo bureau, where his reporting focuses on the trade relationship between Arizona, Sonora and the rest of Mexico.Before joining the station, Murphy was a reporter at the Arizona Daily Star and the Nogales International. Prior to his reporting career, he completed a master’s degree at the University of Arizona’s Center for Latin American Studies and did three wildfire seasons with the Snake River Hotshots. He’s a proud graduate of the University of Montana’s School of Journalism.When he’s not reporting, Murphy is often out in the woods running or riding singletrack, or swinging in a hammock with a book.